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A contract is defined as an agreement enforceable by law. Hence for all contracts there should have an agreement. The agreement arises by one of the parties making an offer and its acceptance by the other party. Thus, both offer and acceptance create an agreement. Therefore for a simple contract, as a first step, there must be an offer made by one party to the other.
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Example: A asks B “ will you purchase my car for Rs.10,000”. In this case A is making an offer or proposal to B. the moment the other party (B) accepts the said offer it result in an agreement.
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How is offer made? 1. Offer is made either by words spoken or by words written. This is an express offer. Ex: If A either tells or writes to B that he is prepared to sell his car for Rs.20,000, it is an express offer.
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2. An offer is made by conduct or behaviour. Then it is an implied offer. Ex: A is standing in a queue for getting ticket for a train journey. Then he is making an offer impliedly to travel in the train.
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Essential Characteristics of valid offer 1. The terms of an offer must be clear and certain. Offer must be communicated to the offeree. An offer must be made with an intention of creating legal obligation. Invitation to an offer is not an offer. Special terms attached to an offer must be communicated.
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6. An offer may be to an individual or to the public at large. 7. Offer may be express or implied. 8. Offer must be made with a view to obtaining the assent of the other party. 9. Offer may be conditional 10.